Is it even possible to win the San Francisco Dream House?

St. Francis Wood mansion can only be claimed if 65,000 raffle tickets sell

An eight-bedroom mansion in San Francisco's St. Francis Wood neighborhood is touted as the grand-prize in the 2016 San Francisco Dream House Raffle.

An eight-bedroom mansion in San Francisco's St. Francis Wood neighborhood is touted as the grand-prize in the 2016 San Francisco Dream House Raffle.

Photo: San Francisco Dream House

Photo: San Francisco Dream House

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An eight-bedroom mansion in San Francisco's St. Francis Wood neighborhood is touted as the grand-prize in the 2016 San Francisco Dream House Raffle.

An eight-bedroom mansion in San Francisco's St. Francis Wood neighborhood is touted as the grand-prize in the 2016 San Francisco Dream House Raffle.

Photo: San Francisco Dream House

Is it even possible to win the San Francisco Dream House?

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A high-profile fundraiser excites San Francisco every year with an array of spectacular prizes from a Tesla to a Tuscan vacation, but the most tantalizing prize is a fabulous estate.

In this year's San Francisco Dream House Raffle, which benefits the Yerba Buena Center for the Arts, a St. Francis Wood manse with a stately brick facade is touted as the grand prize in radio advertisements and on billboards.

After July 9, the lucky holder of one $150 ticket will be the new owner.

Or maybe not.

When you read the fine print, buried in a rules section tucked in the lower left-hand corner of the website, you learn the dream house is only offered as a prize if 65,000 tickets are sold.

How likely is that? It's hard to say. In an email, Yerba Buena spokesperson Voleine Amilcar declined to share whether the nonprofit has ever met the ticket minimum in the raffle's seven-year history. She wrote the raffle is "very popular."

"We're not feeling comfortable in divulging the way in which we administer the raffle," Amilcar said in a phone conversation. "We'd essentially be giving away our playbook."

The organization also refused to provide information to the Bay Area Better Business Bureau, which questioned the raffle's advertising tactics in September 2015.

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In a statement on its website, the BBB said it "requested that the organization clarify the raffle by substantiating whether there is an existing house as pictured in the brochures and on their website, if the house was donated or being purchased, how many houses have been given away, if early bird prizes are guaranteed, and if the raffle was run by Yerba Buena Center of the Arts or another organization."

Yerba Buena responded to the BBB: "Your letter requested that we provide information that we consider to be proprietary and/or subject to non-disclosure agreements. Should you have a specific complaint regarding the nature or accuracy of our advertising materials you should direct them to either the AG's office or the office of a local District Attorney."

BBB spokesperson Jarrod Wise said the bureau is continuing to monitor the raffle.

"We don't really know whether this is really a good thing or a sour thing," Wise said. "We're not 100 percent clear. We haven't really received any complaints on it. It's really hard to tell what's going on. It sounds like people are getting money.

"The question is would they even be eligible for a home. It appears the home does exist. Is there really any potential for winning the home or is it just being used as marketing piece to sell tickets?"

The winner of the Dream House grand prize can choose either the house or a sum of cash. This year's grand prize is $4 million annuity, or a $2.8 million one-time payment, or the $5 million mansion. If 65,000 tickets don't sell by Friday June 24, 2016, the winner takes home 50 percent of the profit from ticket sales, up to a $4 million annuity, or a smaller lump sum. The raffle offers discounts for buying blocks of three or five tickets, so it's difficult to calculate how much might be in the pool. If just 70 percent of the tickets sold, but at the full $150 price, that number would be $3,412,500—that's still a lot of money and an enticing price.

According to a 2009 San Francisco Chroniclestory on the growing trend of dream house raffles among nonprofits, winners who are given the choice tend to go for the money because "it's simpler."

"For cash prizes over $5,000, nonprofits must withhold 25 percent for federal income taxes," Chronicle reporter Kathleen Pender wrote. "If the prize is a house, the winner must give the nonprofit 25 percent of its value for federal withholding before title can be transferred. The winner also pays closing costs, property taxes and other homeownership expenses."

While Yerba Buena guards the inner workings of the contest closely, we do know a few things.

A Dream House ticket buyer has never moved into a house — although it's unclear whether this is because all the tickets haven't sold or because the grand-prize winner opted for the cash prize instead (bear in mind that the house option comes with a sizable annual tax bill).

We also know the estate pictured in this year's glossy Dream House brochure exists.

The organization doesn't provide the address, but it does reveal the neighborhood, and I was able to easily track it down by showing a photo to a friend who grew up in St. Francis Wood.

"I know that house!" she said. "My mom grew up across the street and my parents now live right around the corner. I just drove by it on Saturday and saw moving trucks."

Moving trucks? I was intrigued and decided to knock on the door.

It turns out the owner recently moved back into the home. She said she had signed paperwork promising to keep everything regarding the contest confidential.

To protect the family's privacy, we are not publishing the address.

The eight-bedroom, 9.5-bath house has been on and off the market — both for rent and sale — five times over the past six years. It was first listed at $4.99 million in July 2009. The price was cut $400,000 seven months later before the property was pulled off the market in March 2010.

When the house was listed more recently in October 2015, the price tag was $5.5 million. The listing was removed in December.

Homes that have languished on the market are a trend in the Dream House Raffle. The 2009 Dream House, a newly constructed duplex in the avenues, was on the market for four months before the listing was pulled, and it became the raffle grand-prize. So did the 2010 Dream House, a Noe Valley Craftsman, and the 2013 home.

Often owners of these homes connect with the Dream House Raffle because the nonprofit will pay them to take their property off the market as it becomes a marketing tool.

"Usually, the nonprofit is not given the home," Pender wrote. "It might lease it from the owner with an option to buy if the winner chooses the home. The owner gets paid for keeping the house off the market during the raffle, and even if it doesn't end in a sale, the home gets plenty of free publicity."

How the contest got started

One of the first dream house raffles was reportedly implemented at Mount Madonna School, a college prep academy outside Santa Cruz in 2006. Neal Martin-Zeavy was then a teacher and went on to start a San Francisco-based company called Raffle Administration Corp. and he was hired by nonprofits around the country to hold dream house raffles.

To protect organizations from losses, the contests were structured so a minimum number of tickets must be sold for the home or cash to be awarded. But in some cases, this information was buried or not included in a brochure, and Martin-Zeavy has come under fire for misleading advertising.

Philip Matier and Andy Ross revealed in a 2012 story that Martin Zeavy made $542,385 in the 2011 Yerba Buena raffle. The arts organization took in about $1 million while the remaining money pays for prizes.

SFGate reached out to Martin-Zeavy for additional information and about this year's contest, and he declined to comment. It's unknown whether he's assisting Yerba Buena with the 2016 Dream House Raffle.

Should you buy a ticket?

If you're only buying the ticket because you desperately want the Dream House, then probably not. But if you're interested in winning a cash prize or any of the other 2,300 prizes, your odds are good at around 1 in 30 (depending on how many tickets sell).

When I stopped by this year's Dream House in St. Francis Wood, I bumped into a neighbor who lives across the street and mentioned to him that the Better Business Bureau was questioning the raffle's advertising practices. "I'll still buy a ticket," Adam said. "It's for a good cause."

And that's the thing. Even if the contest is mysterious and it's uncertain whether the house will actually be a prize this year, the raffle raises money for the arts—and for many, that's all that matters.